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NNPC to end JV Cash Call Arrears

by Business News Report

The Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Dr. Maikanti Baru yesterday said that modalities are being worked out to enable NNPC exit Joint Venture cash call arrears by ensuring that outstanding and future payments are made from oil and gas royalties and taxes under a first line charge model.
This came as the Corporation said it has restored the 87.7 million litres Mosimi depot in Ogun State, raising hope of improved product supply. Baru who stated this during his visit to NNPC units in Lagos, said that the current JV payment structure requires urgent review. He explained that the new model being proposed by the NNPC would enable the Corporation to plough back profit and grow the oil and gas business in the upstream for the benefit of all stakeholders.
The GMD further stated that the 12 key business focus areas of the NNPC under his watch are targeted at rejuvenating the entire business operations in order to enable the Corporation deliver on its core mandate to all its stakeholders.
While commissioning the reconstructed Tanks 11, 12, 13 and 22 at the Mosimi depot, he said, “It is pertinent to point out that this project has not only restored the original combined storage capacity of 87.70 million litres for the four tanks, but also increased it by 220,000 litres. This combined storage capacity represents over 54% of the total storage capacity for Premium Motor Spirit (PMS) otherwise known as petrol at Mosimi depot and has significantly enhanced strategic storage capacity of PMS nationwide.
“Today’s exercise is apt as it fits into one of NNPC’s 12 Key Business Focus areas, the restoration of oil and gas infrastructure.”

The GMD, however did not state when the depot, which has been out of use for five months now will be back in operation, neither did he state the cost of the reconstruction.
According to him, the contract for the reconstruction and rehabilitation of the four (4) tanks was awarded on May 17, 2011, by the Federal Executive Council (FEC) to Messrs. Adano Engineering Company Nigeria Limited. The contractor was said to have mobilised for works on 27th September, 2011 in line with the contract. Prior to this, however, the firm of Messrs. A. S. Collins & Associates was commissioned as Engineering Consultants for Pre & Post-Contract Supervision.
It will be recalled that Mosimi depot was constructed in 1978 for the storage and distribution of petroleum products to the western part of the country. Unfortunately, tank 13 was gutted by fire in 1997; while tanks 11, 12 and 22 have worked satisfactorily for 23years but their respective floating roofs collapsed at different times in 2001 which made them unserviceable. The non-usage of these decrepit tanks imposed operational constraints to products storage and distribution in Mosimi area which in turn negatively impacted on the turnaround time of product vessels at Atlas Cove Jetty with concomitant huge demurrage charges to NNPC operations.

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